A timely restructure of interest rate hedges a year ago is paying off for pubs trust
ALE Property
Group which booked a better-than-expected distributable profit of $16.5 million for the 2014 first half.

The property trust has confirmed an interim distribution of 8.20¢ per ­security and reaffirmed its distribution guidance for the full year of at least 16.35¢ per security.

The market value of the hedges is written into the trust’s profit-and-loss statements, creating some volatility in its statutory figures as interest rates fell.

But the distributable profit keeps coming for ALE’s investors, whose stock is trading at close to 40 per cent above the trust’s net tangible assets.

The stock is already delivering a healthy yield in a low interest rate economy, but is actually under-rented.

The sole tenant across ALE’s 87 properties is ALH Group.

The joint venture between Woolworths and Bruce Mathieson is adding considerable value to the properties, which will be taken into account at rent reviews in 2018 and 2028. In the very near term though, managing director
Andrew Wilkinson
is focused on ­wringing even more value from the trust’s borrowings.